Question

Colleen sold a house to Ben for $300,000. Before selling the House, Colleen forgot to tell Ben about a leaky faucet in a little-used sink in the basement, which would cost about $30 to fix. Ben inspected the house, but didn't notice the faucet. Later, Ben wanted to rescind the deal on the basis of fraud or misrepresentation because of the leaky faucet. Which of the following is the best reason why Ben cannot rescind?
Because Y didn't make an express misstatement regarding the faucet, but merely said nothing.
Because Y's failure to notice the leaky faucet means that he did not justifiably rely on X's "misstatement."
Because X's failure to disclose the condition of the faucet is not material.
Because X didn't do anything to actively hide the leaky faucet.

Answer 1

Answer: Because Y's failure to notice the leaky faucet means that he did not justifiably rely on X's "misstatement."

Explanation: Ben may be unable to rescind on the basis that, upon the sale of the property, the leaky faucet is as not intentionally hidden from Ben's notice. If during the property inspection, the leaky faucet was noticed by Ben, and Colleen gave a false statement about the faucet in other to conceal the impairment, then Colleen would have been deemed to have made Ben rely on a false statement and thus making a rescind by Ben would have been possible.